April 24, 2017

Summary: ISO has updated the Farm Excess Liability policy, FE 00 01 04 16. Policies that can underlie the excess policy are the Farm Liability policy, the CGL Farm Liability policy, the Standard Personal or Commercial Auto policies, the Farm Umbrella policy, or the CGL Farm Umbrella policy. Per ISO, the Farm Excess Policy is intended to complement the Farm Umbrella policy. The Farm Excess policy provides higher limits, but no broader coverage. The form was developed because customers had requested a way to have higher limits but not broader coverage. New language is highlighted in bold.

Topics covered:
Definitions
Insuring agreement
Exclusions
Supplementary payments
Limits of insurance
Conditions

Def initions

1.   ”Auto” means:

a.A land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment; or

b.Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.

However, “auto” does not include “mobile equipment”.

2.”Injury or damage” means any injury or damage, as may be defined in any policy of “underlying insurance”, arising from an occurrence or offense.

3.”Insured” means:

a.The Named Insured shown in the Declarations; and

b.Any “insured” under any policy of “underlying insurance”, but only to the extent, and only for the coverage, for which such person or organization is an “insured” under the “underlying insurance”.

4.”Mobile equipment” means any of the following types of land vehicles, including any attached machinery or equipment:

a.Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads;

b.Vehicles maintained for use solely on or next to premises you own or rent;

c.Vehicles that travel on crawler treads, except that snowmobiles are “mobile equipment” only while on an “insured location” or any premises you own or rent;

d.Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:

(1)Power cranes, shovels, loaders, diggers or drills; or

(2)Road construction or resurfacing equipment such as graders, scrapers or rollers;

e.Vehicles not described in Paragraph a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:

(1)Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or

(2)Cherry pickers and similar devices used to raise or lower workers;

f.Vehicles not described in Paragraph a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo.

However, self-propelled vehicles with the following types of permanently attached equipment are not “mobile equipment” but will be considered “autos”:

(1)Equipment designed primarily for:

(a)Snow removal;

(b)Road maintenance, but not construction or resurfacing; or

(c)Street cleaning;

(2)Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and

(3)Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment.

However, “mobile equipment” does not include land vehicles that are subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. Land vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law are considered “autos”.

Analysis

The discussion begins with the definitions, and defined terms are critical to the coverage provided. “Auto” is the first defined term and includes attached machinery or equipment or any land vehicle subject to vehicle registration laws. A differentiation is made between “auto” and “mobile equipment.” “Mobile equipment” is defined as vehicles used primarily off public roads, used solely on premises owned or rented to the insured, vehicles traveling on crawler treads, or vehicles maintained for moving permanently mounted equipment. Examples of mobile equipment are bulldozers, farm machinery, and forklifts; permanently mounted equipment including power cranes, shovels, graders, air compressors, or building cleaning equipment. Vehicles not described that are used for other than the transportation of persons or cargo are also mobile equipment. An exception exists for self-propelled vehicles with certain permanently attached equipment – equipment for snow removal, road maintenance, street cleaning, cherry pickers mounted on an auto or truck chassis, air compressors, pumps, and generators—all these are considered autos. Note that these vehicles are either self propelled or used for road maintenance, or both. Any land vehicle subject to a compulsory financial responsibility law is considered an auto.

“Injury or damage” is defined as injury or damage as it is defined in the underlying policy. This is because the intent of this policy is to provide additional limits and not broader coverage. The definition of “insured” is handled the same way—how the underlying policy defines insured determines how an insured is defined in the farm excess policy. No changes to the definitions have been made in the 2016 update.